If Obamacare subsidies die, feds could pay $2.3B more next year

The House is back in session today, and the bumpy push to repeal the Affordable Care Act could get a burst of momentum.

But first: the latest twist in the drama over Obamacare cost-sharing subsidies. President Donald Trump suggested last night that he may push off until fall the fight over funding for the border wall. Does that mean he'll allow the subsidies to go ahead — or does he plan on holding them hostage in some other way? In the meantime …

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IF OBAMACARE SUBSIDIES DIE, GOVERNMENT COULD PAY $2.3 BILLION MORE NEXT YEAR — That's according to a Kaiser Family Foundation report out this morning, a new wrinkle in the standoff over the fate of the ACA's cost-sharing subsidies.

Discontinuing the subsidies could drive health insurers from the Affordable Care Act's marketplaces by removing a major source of their funding. Kaiser notes that the subsidies are projected to pay out $10 billion next year.

But there's a less discussed scenario that could backfire on the administration. Insurers could remain in the marketplaces and hike the premiums of their plans to offset the loss of subsidies, the Kaiser researchers note. That premium hike — projected to be 19 percent — would then require the government to pay out an additional $12.3 billion in tax credits next year.

"We estimate that the increased cost to the federal government of higher premium tax credits would actually be 23 percent more than the savings from eliminating cost-sharing reduction payments," Larry Levitt, Cynthia Cox, and Gary Claxton write. That would lead to a net hike of $2.3 billion in federal spending in 2018.

"Extrapolating to the 10-year budget window … the federal government would end up spending $31 billion more if the payments end," they add. Read the report.

OBAMACARE REPEAL

Moderates mum on repeal bill changes that would strip consumer protections. The latest version of Republicans' health bill would allow states to opt out of severalkey Obamacare protections, allowing insurers to charge older and sicker people more than younger and healthier ones, according to a summary obtained by POLITICO.

But so far, none of the moderateswho opposed an earlier repeal bill have publicly committed to supporting the latest version. More.

Sean Spicer: No 'artificial deadline' to get deal done. The White House spokesman told reporters on Monday that there's no need to rush, walking back the administration's perceived insistence on a symbolic health care vote this week.

"Whenever the speaker and the leadership over in the House tell us that they feel confident that they have the votes, then we would encourage them to move forward," Spicer said. "The president has been clear in his comments that our goal is to get it done and get it done right and to get it done to make sure that we have the votes." More.

IT'S DAY 96 OF THE TRUMP ADMINISTRATION — Where the president's obsession with cable TV has real consequences for health care messaging. Many ad campaigns that PULSE has covered in the past few months have run on "Morning Joe" or "Fox and Friends." It's even affected how critics of Republicans' health care plan choose to talk about it, with WaPo reporting on Sunday that some conservative leaders "took pains" not to criticize Trump's approach in their TV appearances.

Scott Gottlieb breaks with White House on 'right-to-try.' Trump's nominee to head the FDA took a more middle-of-the-road position on "right-to-try" laws than the White House, telling the Senate HELP Committee he'll work to balance the needs of patients with the need to conduct clinical trials of experimental medicines, Pro's Sarah Karlin-Smith reports.

The Trump administration, particularity Vice President Mike Pence, has been pushing for a national right-to-try law that would allow terminally ill patients to skirt the FDA's compassionate use process when requesting access to experimental drugs.

Gottlieb said he will work to address the needs of patients who want access to investigational medicines without compromising the clinical trial model. His remarks, in response to questions from Senate HELP Committee ranking member Patty Murray of Washington, indicate he wants the FDA to remain part of the process. More for Pros.

Murray questions extent of Gottlieb's divestments. In written questions made available to POLITICO, Murray asked Gottlieb whether he would commit to recusal from more than 40 companies — beyond those specified in Office of Government Ethics paperwork. The additional companies were clients of companies where he previously worked.

Gottlieb's responses provide no clear answer, and given some of the new Trump administration rules it may take some time for the ethics experts to sort it out. In his ethics paperwork Gottlieb committed to recusing from more than 20 companies for one year. More for Pros.

Tim Murphy rails against Trump's pick for mental health chief. Murphy, the key Republican House sponsor of mental health reform legislation approved last year, said he was “stunned” by the nomination of Elinore McCance-Katz to serve as the assistant secretary for mental health and substance use.

In a statement released Monday, the Pennsylvania congressman bashed McCance-Katz for working as chief medical officer at SAMHSA under the Obama administration and accused her of being part of the “old regime” that was “incapable and unwilling” to work with Congress.

“While she was serving at SAMHSA, there were questionable hiring practices, no accountability for federal grants, an anti-medical approach to serious mental illness and substance abuse treatment and most importantly, the continued upward rise of suicide and substance abuse deaths,” he said in a statement.

… Sources familiar with the vetting process said Murphy told candidates he would be playing a crucial role in filling the position, Pro's Brianna Ehley reports. He was pushing for Michael Welner, a forensic psychiatrist, to get the job. Murphy had pushed back against the Trump administration’s first pick, Judge Steve Leifman, who was offered the position in February. His offer was rescinded without explanation last month.

RESEARCH FUNDING

FIRST IN PULSE: Report blasts Ivy League schools for not disclosing NIH funding for animal experiments. That's based on a review of 100 press releases published by Ivy League universities, which found that all of the releases failed to disclose the NIH funding as required.

The review was conducted by the White Coat Waste Project, a group that has fought taxpayer-funded animal experiments, and Restore Accountability, which has targeted government spending. See the report.

"We believe it is unacceptable for agencies and grant recipients to disregard longstanding transparency requirements, and those agencies have an obligation to spend taxpayer dollars effectively and efficiently," the senators write in a letter this morning. Read the letter.

FIRST IN PULSE: Science Coalition IDs 102 companies 'created' by federally funded university research. The report concludes that the companies, which employ 8,900 people, wouldn't exist if not for grants from the National Institutes of Health, National Science Foundation and other agencies that are currently being targeted by the White House for cuts.

The initial funds that helped with the companies' creation were relatively small; 80 percent of those companies received less than $5 million in federal funds. It's an example of how individual research grants can go a long way, the report concludes.

"Basic scientific research is the smallest slice of the nation’s R&D pie, yet it is the spark that ignites discovery and innovation in the United States," said Anna Quider of the Science Coalition. See the report.

AROUND THE NATION

The top economic issue for Americans? Health care. That’s according to a new Marketplace-Edison Research poll on causes of economic anxiety, which found that the level of anxiety about health care is exceptionally high," Larry Rosin of Edison Research told the public radio program. Respondents said they worried about a range of factors like cost or access to coverage. "Of all the reasons that people have economic anxiety in the states, it turns out health care is probably the single biggest driver." More.

The connection between health care and employment was also strong, Rosin added. "Having good health care as part of that job was actually the single biggest definition of a good job for people," he pointed out

Texas wants control of its Medicaid program. The Texas Senate on Monday passed a resolution asking the U.S. Congress to continue funding the state's Medicaid program while transferring administration to the state, Pro's Renuka Rayasam reports from Austin.

The resolution lays out how Texas should be allowed to set its own rules for Medicaid, such as what benefits are covered and who is eligible for the program, because Medicaid costs comprise 30 percent of the state’s budget. State Sen. Charles Perry, the resolution’s author, argues that allowing Texas to set its own rules for the program could lower costs and waiting times for appointments.

Nearly all beneficiaries covered by Ohio Medicaid expansion have 'no plausible' alternative. That's according to a new Ohio State University study, which concludes that 95 percent of newly enrolled beneficiaries would be without a plausible pathway to coverage if the ACA's expansion is repealed without a replacement. “These are very low-income adults, many of whom lost their jobs and have nothing to go back to,” said study lead author Eric Seiber.

As of October 2016, more than 700,000 Ohioans had gained coverage through the ACA's expansion. More.

AROUND TOWN

Chris Christie in D.C. for opioid commission briefings. The New Jersey governor is in town today for legislative briefings for the commission that Trump tapped him to run, POLITICO New Jersey's Katie Jennings reports.

How he's talking about opioid issues. In an interview on CNN's "The Lead" on Monday night, Christie discussed the opioid crisis and laid out potential tactics to solve it. "We need to deal with interdiction at the border," the governor said, acknowledging Trump's border wall as one measure, but also said education and public health efforts would be key components too. See video.

… Asked by CNN's Jake Tapper to grade Trump's first 100 days, Christie assigned it a "B." According to Christie, Trump's staff hadn't always put the president in position to succeed, and he cited Republicans' failure to pass a health care bill as an example.

"I don't think the way the whole health care situation was handled either on the Hill or at the White House was exemplary," Christie said. "We didn't get the result we needed to get."

ON THE HILL

Muscular Dystrophy Association pushing for NIH funds. Constituents suffering from ALS, muscular dystrophy and other neuromuscular diseases will hit the Hill today, pushing back against proposed cuts in NIH funding, calling for funding hikes in fiscal years 2017 and 2018 and an increase in the FDA budget and an increase in funding for newborn screening.

NAMES IN THE NEWS

Josie Martin joins Purdue Pharma as VP of corporate affairs and comms. Martin previously served as executive vice president of public affairs at Pharmaceutical Research and Manufacturers of America. She'll lead Purdue's work on corporate communications, government affairs and health policy efforts. The company is best known as an opioids manufacturer.

Aaron Fobes starts at Celgene to work on public affairs and policy. Fobes, who served as a spokesman for the Senate Finance Committee's Republicans, is now associate director of public affairs and policy at Celgene.

Adrienne Morrell, Emily Murry picked for POLITICO Playbook power list. Morrell was recently appointed as executive vice president of federal and external affairs at America’s Health Insurance Plans, the top insurance trade association. Murry is staff director of the House Ways and Means Committee’s subcommittee on health and formerly served as senior policy adviser to House Majority Leader Kevin McCarthy (R-Calif.). More.

WHAT WE'RE READING

Express Scripts is losing Anthem as a customer, and the drug benefit manager’s shares plunged on Wall Street as a result, Bloomberg’s Robert Langreth reports. More.

At Business Insider, Lydia Ramsey and Skye Gould use the Express-Anthem breakup to tee up a visual guide into how the PBM industry works. More.

Hollywood writers are bracing for a potential strike and — surprise, surprise — health care costs are a key sticking point in their union’s negotiations, Vox’s Dylan Scott writes. More.

A new study links consuming sugary drinks with markers of accelerated aging and early signs of Alzheimer’s disease, NYT’s Nicholas Bakalar writes. More.

Authors:

About The Author

Dan Diamond is the author of "POLITICO Pulse," the must-read morning briefing on health care politics and policy. He's also the creator of PULSE CHECK, the popular podcast that features weekly conversations with some of the most interesting and influential people in health care — a show that's become "the Charlie Rose of health care," says Andy Slavitt, who ran Medicare, Medicaid and the Affordable Care Act under President Obama.

Before joining POLITICO, Diamond edited the Advisory Board Daily Briefing, served as the Advisory Board's senior director of news and communications and created and hosted the popular Weekly Briefing health care podcast. He also covered health care policy, business, and strategy for FORBES. His work has appeared at Vox, Kaiser Health News and other publications.

Diamond is a graduate of the University of Pennsylvania and has appeared to discuss health care, politics, and policy on NPR's "All Things Considered" and "1A," the NBC Nightly News, the BBC, CBS, MSNBC, the Dan Patrick Show, KQED's "Forum" and other programs. He was recently named a 2015-2016 fellow of the Association of Health Care Journalists.